New Residential Investment Corp. [1] has entered into an agreement to purchase Genesis Capital LLC [2] with the financial help of the Goldman Sachs Group [3].
Genesis, who offers various funding options to the nation’s top residential single- and multi-family real estate developers, is set to originate about $2 billion in loans this year and has originated over 12,000 loans since 2014.
On the other hand, New Residential is a provider of capital and services to the mortgage and financial services industry. The company’s mission is to generate attractive risk-adjusted returns in all interest rate environments through a complementary portfolio of investments and operating businesses. The company also wholly owns and operates origination and servicing companies Newrez LLC [4] and Caliber Home Loans Inc. [5] The company is managed by an affiliate of Fortress Investment Group LLC.
“The acquisition of Genesis adds a new complementary business line to our Company and advances our ability to create and retain additional strong housing assets for our balance sheet,” said Michael Nierenberg [6], Chairman, Chief Executive Officer and President of New Residential. “We are excited to work with the seasoned Genesis team and add business purpose lending to our suite of products, furthering our connectivity with a new subset of borrowers. We see the acquisition of Genesis as a great opportunity that supports our growing single-family rental strategy and one that allows us to capture additional unmet demand from our Retail and Wholesale origination channels.”
“We are thrilled to join the New Residential family and share our mission of providing differentiated solutions for our borrowers,” said Robert Wasmund [7], Chief Executive Officer of Genesis. “Over the years, we have grown Genesis into a leader within the business purpose lending industry, offering developers a broad suite of customized solutions. We pride ourselves on executional excellence, which is why almost all of our customers are repeat borrowers and our portfolio has exhibited minimal losses. We look forward to combining our experience with New Residential’s deep industry knowledge and robust balance sheet as we seek to expand our product offerings and grow in new markets.”
According to the press release, New Residential intends to finance the transaction with existing cash and committed asset-based financing from Goldman Sachs. The transaction is expected to close during the fourth quarter of 2021, subject to certain approvals and customary closing conditions. New Residential intends for Genesis to operate as an independent subsidiary under its umbrella.